Online gaming revenues from uncontrolled platforms reached a staggering $67 billion in the recent past year.
In a recent report commissioned by the Campaign for Fairer Gambling, gaming consultancy Yield Sec has highlighted the challenges and proposed solutions to regulating illegal online gambling in the United States.
The report identifies the prevalence of illegal platforms as a major issue, with 74% of the $90.1 billion U.S. online gambling market in 2024 operating illegally. This is in stark contrast to the 95 licensed sites that exist, and the report suggests that illegal operators are six times more heavily promoted by affiliates.
Illegal operators use various tactics to evade regulations, such as operating offshore, exploiting regulatory gray areas, and leveraging major sports events and media channels for promotion. The anonymity provided by cryptocurrencies also aids their operations.
The report also points out the inconsistency in regulations across states. States like Pennsylvania, New Jersey, and Michigan have successful, regulated markets where legal operators hold a majority share, while in larger states like California, Texas, and Ohio, weak or absent laws allow illegal operators to dominate up to 85% of the market.
Enforcement efforts are hindered by a lack of political and regulatory commitment, according to the report. Advanced real-time tracking technology exists to monitor illegal gambling activities, but its implementation is lacking.
The report proposes several solutions to address these issues. These include stronger regulation and enforcement, the use of real-time data and technology, state-level action on sweepstakes and gray-area operators, and a focus on consumer protection.
Ismail Vali, the founder and CEO of Yield Sec, suggests that blame for the continued growth of the unregulated online market cannot be placed solely on gambling regulators. He emphasizes that all stakeholders, including operators, law enforcement, media companies, social platforms, and governments, have a role to play in addressing the problem.
Derek Webb, a poker pro and table game innovator who leads the Campaign for Fairer Gambling, seeks evidence-based gambling reform to protect online borders, defend the economy, and minimize gambling harm. He criticizes the legalization of online sports betting and casinos in certain states as an unmitigated disaster.
The report findings underscore that legalization alone has not curtailed illegal online gambling. Instead, coordinated regulatory strategies combined with modern surveillance technologies and robust enforcement are essential to reclaim market share from illicit operators and protect consumers.
The report also notes that illegal gambling platforms offer events such as election and tariffs betting alongside sports and financials. This highlights the need for comprehensive regulation that covers all aspects of online gambling to ensure consumer protection and fair play.
The legal online gambling space saw a revenue growth of 36% last year, with Rhode Island joining six other iGaming states and more sports betting states coming online. However, the offshore, illegal market saw a growth of 64% in gross gaming revenue. This underscores the urgency of addressing the issue of illegal online gambling in the U.S.
[1] Yield Sec Press Release, "Yield Sec Releases 2024 Report on the State of Illegal Online Gambling in the U.S.", [date]. [2] Campaign for Fairer Gambling, "About Us", [url]. [3] Ismail Vali, Interview with [media outlet], [date]. [4] Derek Webb, Interview with [media outlet], [date]. [5] Yield Sec, "2024 Report on the State of Illegal Online Gambling in the U.S.", [url].
- The report by Yield Sec, commissioned by the Campaign for Fairer Gambling, details the escalating issue of illegal online gambling in the United States, highlighting the existence of 74% of the $90.1 billion market in 2024 as illicit.
2.Illegal operators use various tactics to evade regulations, including offshore operations, exploitation of regulatory gray areas, and utilization of major sports events and media channels for promotion.
3.The report suggests that illegal operators are six times more heavily promoted by affiliates than their licensed counterparts.
4.While states like Pennsylvania, New Jersey, and Michigan have successful, regulated markets, states such as California, Texas, and Ohio are dominated by illegal operators due to weak or absent laws.
5.The report calls for stronger regulation and enforcement, state-level action on sweepstakes and gray-area operators, the use of real-time data and technology, and a focus on consumer protection to address these issues.
6.Ismail Vali, CEO of Yield Sec, stresses the collective responsibility of all stakeholders, including operators, law enforcement, media companies, social platforms, and governments, in addressing the continued growth of the unregulated online market.
